Enbridge eyes NT gas link

Canadian pipeline giant Enbridge has emerged as a competitor to
APA Group
to build a $1.3 billion connection from the Northern Territory to the national gas grid.

NT Chief Minister
Adam Giles
is ramping up efforts to position the territory as a potential solution to the energy supply crisis developing in NSW, as outlined in a letter Mr Giles drafted over the Easter weekend and will send this week to new NSW Premier
Mike Baird
, with an invitation for further discussions.

“Because of his other portfolio role he may not be aware of the opportunities in the Territory," Mr Giles told The Australian Financial Review.

He said he had already secured a broad agreement from South Australian Premier
Jay Weatherill
to work towards a gas pipeline link between Alice Springs and the Moomba gas hub in South Australia’s north.

That accord, which could be firmed up into formal memorandum of understanding at the next Council of Australian Governments meeting of state and territory leaders on May 2 in Canberra, would pave the way for gas from the NT to reach as far as NSW.

NSW is facing a potential shortfall in gas supplies in 2016 as delivery contracts expire and some gas is redirected to Queensland’s LNG export projects.

APA, the country’s biggest gas pipeline owner, is carrying out a $2 million study on linking the NT into the national gas grid.

It is focusing on two options: a link between Tennant Creek and Mount Isa in Queensland, costing about $900 million, or one between Alice Springs and Moomba, which would cost about $1.3 billion.

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Mr Giles said he preferred the link with South Australia, which would be more useful for supplying local users.

“My opinion is that while they are both good, the Alice-to-Moomba one may present better opportunities from a domestic point of view, but we are still doing modelling on both," he said.

Calgary-based Enbridge has been on the prowl for opportunities in Australia for years but has yet to buy or build any assets.

It is believed to be part of a consortium with Queensland Investment Corporation and Industry Funds Management that is mulling an offer for pipelines likely to be sold off by BG Group at its $US20.4 billion Queensland liquefied natural gas project.

Referring to Enbridge’s interest in the NT, Mr Giles said it had “probably seen our commentary and they are probably looking for new markets and new opportunities".